Introduction
Research Questions
- Would large earnings impacts persist two more years, and would previously observed differences between subgroups also continue?
- Would impacts radiate to other dimensions of financial security and well-being?
- Would the COVID-19-induced economic downturn have different effects on the earnings and Unemployment Insurance (UI) benefits received by members of the study’s randomly assigned treatment and control groups?
- Would Year Up’s net benefits continue to exceed its costs?
This report provides seven-year findings on the impacts and net societal benefits of Year Up, a training program for young adults aged 18-24 with high school credentials. The period it covers extends beyond the onset of the COVID-19 pandemic, affording an opportunity to compare the ensuing economic downturn’s effects on treatment and control group members.
Run by an organization of the same name, the program operates from offices in nine cities. Year Up is a full-time, one-year program for young adults who are disconnected from work and school, or at risk of disconnection, and are motivated to do well in the program. Year Up is divided into two six-month phases: an initial training phase (“Learning and Development,” or “L&D”), followed by an internship phase. It provides three main services:
- Instruction during the L&D phase in technical skills in selected occupations (IT, quality assurance, financial operations, project management, and customer service); business communication (written and spoken English); and professional skills (behaviors for success at work).
- Wrap-around support services during both phases, applying a “high expectations, high support” philosophy. Key strategies include behavior contracts (specifying expected professional behaviors), financial stipends, social support from staff and peers organized as learning communities, staff advisors and social workers, and outside mentors.
- Strong connections to employment, including work-focused learning during L&D, six-month internships at local employers, and intensive post-program employment services.
Year Up is one of nine programs included in the Pathways for Advancing Careers and Education (PACE) project sponsored by the Administration for Children and Families (ACF) within the U.S. Department of Health and Human Services. PACE is testing different strategies for helping low-income adults access career pathways in growing occupations.
Analyses for the last PACE report on Year Up (Fein et al. 2021) showed large positive earnings impacts and net societal benefits that persisted at least five years.
Purpose
Year Up’s mission is to close the “Opportunity Divide” — the gap between millions of young adults with low incomes and U.S. firms seeking to find well-qualified entry-level workers in technical fields. The program’s twin goals are to help young adults access well-paying careers with good potential for upward mobility and address shortages of needed workers in growing occupations. The purpose of the research undertaken here was to evaluate whether Year Up was successful in increasing earnings and related outcomes, and whether its benefits exceeded its costs.
Key Findings and Highlights
The new analyses provide the following answers to the above questions:
- Year Up’s large positive earnings impacts persisted undiminished to the end of the seven-year follow-up period.
Average quarterly earnings in Quarters 23-24 (the report’s single confirmatory outcome) were $1,895 higher for treatment than control group members (a 28 percent increase over the control group’s $6,901 average quarterly earnings). Impacts of about $2,000 per quarter extended to the end of the seven-year follow-up period. Although large for nearly all subgroups and offices examined, the size of impacts varied to a considerable degree across groups, as in earlier analyses.
- Favorable impacts extended to wider financial outcomes, but effects in other spheres of life were minimal.
Increased earnings led to increases in household and personal income and decreases in housing insecurity, debt, and public benefit receipt. There were no effects on longer-term education credentials, psycho-social well-being, family formation, or self-assessed health.
- The COVID-19 pandemic’s economic effects were somewhat less detrimental for treatment than for control group members. As a result, favorable impacts increased for average earnings and emerged for the first time for UI benefits in the quarters immediately following the pandemic’s March 2020 onset.
When the pandemic began, study participants were at varying durations (22-28 quarters) from random assignment. Assessing pandemic-related shifts required reorganizing the data to analyze outcomes for calendar quarters. Compared to 2019, the treatment-control difference in average quarterly earnings increased by $472 and fell by $381 for UI benefits in the second quarter of 2020. Although these differences from 2019 persisted over the following year, they diminished in size and were no longer statistically significant after the third quarter of 2020.
- The net benefits to society per participant rose from $15,349 in the five-year analysis to $33,884 for the seven-year period, representing a $2.46 return per dollar spent on Year Up.
With two more years of undiminished earnings impacts and no additional costs, the net gain to society climbed to $33,884 per participant—the difference between a net benefit of $57,019 and a net cost of $23,135.
Methods
The study design involved random assignment of 2,544 eligible young adults to treatment and control groups. Year Up staff encouraged the former to enroll in the program but did not allow the latter to participate. The research team measured and compared average outcomes for the two groups over successive follow-up intervals. Data sources include: a follow-up survey conducted six years after random assignment and two sets of administrative records extending for seven follow-up years. The administrative data records consist of quarterly wage records from the National Directory of New Hires and college enrollment and credential records from the National Student Clearinghouse. The study also included a cost-benefit analysis.
Citation
Fein, David and Samuel Dastrup. 2022. Benefits that Last: Long-Term Impact and Cost-Benefit Findings for Year Up. OPRE Report 2022-77. Washington, DC: Office of Planning, Research, and Evaluation, Administration for Children and Families, U.S. Department of Health and Human Services.
Glossary
- ACF:
- Administration for Children and Families
- PACE:
- Pathways for Advancing Careers and Education
- TANF:
- Temporary Assistance for Needy Families